Case 27: Rethinking food and beverage packaging

The market

In 2008, global consumption of liquid dairy products reached a record 258 billion liters, a 2.2% increase over the previous year. This represents an additional four billion liters of milk. The global market for aseptically packaged beverages totaled 86 billion liters, encompassing 187 billion packages. Sales have grown by more than six percent annually since 2003, with Asia experiencing the fastest growth at over 13 percent per year. Milk accounts for more than 45 percent of all aseptically packaged products. Aseptic packaging allows for the separate sterilization of food, beverages, and their packaging, followed by their combination and sealing under sterile conditions. This niche application for beverages represents a rapidly growing market, particularly as the packaging industry increasingly adopts multi-layered materials for cartons, pouches, and bottles. By 2013, the global market will reach 113 billion liters with 265 billion packages. In Asia, consumption is growing faster than anywhere else in the world, resulting in an 11% market increase. Tetra Pak controls 80% of the global market with annual sales of $10 billion. SIG, the world's second-largest manufacturer of cartons with a 15% market share, generates $1.5 billion in revenue. Both companies are headquartered in Switzerland. However, Tetra Pak originated in Sweden, while SIG is controlled by the Rand Group of New Zealand. The German Bosch Group is also a major competitor in this multi-layer packaging market. This type of packaging is used for numerous consumer goods categories, including beverages, cosmetics, coffee, tea, snacks, and baked goods.

Innovation

Food companies are seeking technologies to improve the shelf life and traceability of their products. The demand for longer shelf life combined with greater sustainability is driving the industry to rethink packaging techniques, shifting towards biodegradable films and thin-film aluminum. Food-grade polyethylene (PE) may one day be recycled with a biodegradable polymer, such as those produced by Novamont (Italy) or Braskem (Brazil). Conversely, aseptic packaging and diapers are the two main contributors to the growth of municipal solid waste. Market leaders and patent holders of multilayer packaging possess the design and engineering capabilities to assemble complex packages, but no one seems to know how to separate them yet. While efforts are being made to recover the fibers, the consumption of large quantities of water, the plastic and aluminum complex, in sheet or dust form, poses a major challenge. Aluminum represents an unacceptable waste stream that the industry has been unable to address. Although this layer of pure non-ferrous metals is essential to provide the air barrier, uncontrolled discharge means that every year 380,000 to 420,000 tonnes of aluminium are dumped into landfills, making it the largest deposit of this pure metal (on average 1.5 grams of Al per package).

Ms. Gloria Niño López earned her degree in biology in her native Colombia and later specialized in food science in Mexico. She studied the ease with which lichens penetrate rocks and dubbed them the "miners of the world." Indeed, their hyphae are only two cells thick, allowing them to penetrate rock at an astonishing speed. Around the time aseptic packaging was appearing on the market in Bogotá, she happened to notice in her laboratory kitchen how sour milk from opened cartons had spilled onto a compact disc (CD). She realized that the fermented milk dissolved the aluminum layer on the CD within minutes, leaving behind clean polycarbonate plastic. Further observation confirmed that even the milk carton was beginning to separate where it had been cut. As a microbiologist by training, she quickly identified the species responsible for this process and developed a solution using microorganisms available worldwide that are naturally attracted to decomposing beverages or food. This is a standard solution for separating multilayered materials, an open-source technology.

Anders Byström reached similar conclusions while operating the Bedminster waste recycling plant in Stora Vika, near Stockholm. After three days of exposure in the rotary kiln, aseptic packaging, food packaging, coffee bags, and CDs left behind completely separated aluminum foil and dust. Although the process has been proven effective in Japan (in cooperation with Tetra Pak Japan), Brazil, Colombia, the United States, and Sweden, the industry has so far remained reluctant to actively commit to developing a decentralized process for separating multi-layered materials.

The first cash flow

It was the mayor of Curitiba, Casio Taniguchi, who decided in 2000 to create a social enterprise for collecting aseptic packaging and separating it into three main components (paper, PE, and aluminum). Due to a lack of support from suppliers who refused to make their industrial waste available for recycling, the project faced a difficult battle. However, the experiences gained in Curitiba, Tokyo, and Bogotá allowed for the refinement of the process and, above all, proved that the biological solution could be produced locally. This paves the way for decentralized, socially-oriented projects that relieve landfills and incinerators of a major and growing burden: multi-layered packaging. The Politecnico di Torino, under the direction of Professor Luigi Bistagnino, developed a detailed technical and economic plan that confirmed the cost-benefit analysis.

The opportunity

Aluminum represents only a tiny fraction of aseptic packaging, food packaging, pharmaceutical containers, or CDs and DVDs. The possibility of setting up small operations combined with social benefits—such as paying for bus tickets for marginalized communities, as is the case in Curitibá, which ensures perfect sorting of packages from the landfill—provides a platform for entrepreneurial initiatives wherever there is a landfill site. These projects help generate multiple cash streams, overcoming the traditional core business problem. Indeed, if one focuses solely on aseptic packaging, the volume may be too small. However, if one considers all multi-layered materials, the characteristics of the blue economy become evident: going beyond cost reduction by ensuring the generation of multiple revenue streams. The first actor is paid to recover the waste. The second is paid to extend the landfill's commercial lifespan by using the waste as raw materials. The third player sells the three recycled materials to manufacturers in the form of sheets or dust, and thanks to the high quality of the ingredients used, high prices are guaranteed. In this case, the basic ingredient needed for separating aluminum is produced from fermentation residues delivered with packaging waste. This creates an inexpensive and self-sufficient input. Finally, this economic model offers companies the opportunity to raise public awareness that their waste will be reused at the end of its life to create jobs and new products or food. Although cities are not considered entrepreneurs, entrepreneurs could contact the city and establish a consortium, as is currently the case in various parts of the world. The Politecnico di Torino is ready to lead the way.